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Auto insurance for young people

Getting a driver’s license and your first car is exciting, but it also comes with a lot of responsibility. This freedom comes with some responsibility, namely, you have to have auto insurance. While you might avoid having to take on this responsibility if you’re a young rap mogul or have a recurring role on Jersey Shore, odds are, if you’re like most young drivers, your parents are making you pay for some or all of your car insurance. Sometimes, seeing the prices for auto insurance could make you think the only way to pay for it would be to land a recording contract. Fortunately, there are ways to lower the cost for you and/or your parents.

Before looking at how to save money, however, it is first necessary to understand why you need auto insurance in the first place. If you live in the United States, every state will require you to have some type of insurance in order to legally drive a car. While the exact requirements will vary between the states, these laws are designed to protect anyone who is hit by another driver. In the event of an accident, the insurance that you buy will pay the people that are injured. These laws make sure that if someone is hit by another driver, they will have their property replaced or repaired and their health care bills paid.

By now, you’ve probably met someone who had no idea that there was any responsibility involved with driving a car. You know the type; they just assume that anything that happens to them while driving will be taken care of by Mom and Dad. Every state realizes that people like this exist, and in order to protect responsible people like you and me, they make it a crime to drive without insurance. This means that if you are pulled over by a cop and cannot present proof that you have insurance, you could get a ticket or even be arrested.

This insurance requirement means that even you have to get insurance. While it may seem that you pay more for insurance than you do for your car, there are ways to cut this cost down.

Younger drivers also tend not to qualify for the best discounts. It is rare, for example, to find a driver who qualifies for a discount because they have their homeowner’s insurance through the same company. Longevity discounts and customer loyalty discounts also usually don’t apply.

Fortunately, there are several things you can do to lower your auto insurance rates. The following suggestions come from a variety of auto insurance companies.

  • Look for discounts. While you may not qualify for the best discounts, they are given for young drivers who have good grade point averages, clean driving histories, or even good discipline records at school. Ask your insurance agent what discount you qualify for, and also ask him or her if there are any discounts that you could qualify for if you made some minor changes. For example, installing a car alarm might lower your premium if you have comprehensive insurance on your vehicle.

  • Drive a cheaper car. If you have collision or comprehensive insurance, your insurance company’s risk increases, since they will have to pay out more money to repair or replace your vehicle if you cause an accident. This added risk means you have to pay a higher premium. Furthermore, some types of vehicles have been shown to be more accident prone than others. For example, young people who drive sports cars tend to be in more accidents and cause more damage than young people who drive compact cars. If you drive a cheaper car, your auto insurance rates will tend to be lower.

  • Become a secondary driver on your parents’ insurance policy. While you may not qualify for the best discounts, odds are your parents do. By being listed as an additional driver on their policy instead of taking out your own policy, you can save a lot. The catch is that you usually have to be living under their roof (going to college is an exception to this rule, however).

  • Cut back your coverage level. There are three levels of auto insurance coverage, basic, collision, and comprehensive. Basic coverage gives you just enough insurance to meet your state’s requirements, collision will cover the damage to your car in an accident, and comprehensive will cover just about anything you can think of. Obviously, comprehensive insurance is the most expensive. If you cut your coverage back to the minimum required, you can cut your insurance costs drastically. Of course, you will need to have a plan in case you cause an accident or your car is vandalized, because your insurance will not cover you in these cases.

  • Raise your deductible. If you ever have to make a claim against your insurance, you will be expected to pay for some of the damage yourself. The amount of this damage that you pay for is called the deductible. By having you pay for some of the damage, the insurance company is able to charge you less because the potential amount of damage they would have to pay for is limited. A deductible also discourages you from claiming every minor accident.

By raising your deductible, you are agreeing to pay more of the costs if you are in an accident. Because the insurance company will not have to pay as much, you get a lower premium. OF course, it is important to make sure that you have money on hand to cover yourself if you are in a car accident.

  • Take a class. A number of classes, from driver’s education to defensive driving are offered to young people. Taking these classes helps to make you more aware of your surroundings when you’re driving and also gives you some good strategies for avoiding accidents and other dangerous situations. Because students who take these classes are less likely to be in an accident, many insurance classes offer young people discounts on their auto insurance if they agree to take them.

In addition to saving money on your auto insurance, there are also several ways that you can prevent your rates from going up. Getting in an accident or even getting a speeding ticket can mean that you are much more likely to be in another accident. Because of this, insurance companies will see you as a bigger risk, and increase your rates.

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